This morning’s payroll report showed that the economy added 151,000 jobs in August. To put things in perspective, we need about 100,000 jobs a month just to keep up with population growth. Meanwhile, 260,000 jobs would lower the unemployment rate and increase the labor force participation rate, pulling more missing workers back into the game. Increasingly, economic commentators are quick to point out that, as the economy gets closer to full employment, we will add fewer jobs each month. This is true, but by every measure, we are not there yet.
August’s payroll number is weak tea—we need to have stronger job growth for a more sustained period before we can say we’re at full employment. The unemployment rate, the labor force participation rate, and the employment-to-population ratio were little changed. And, year-over-year nominal wage growth rose by 2.4 percent, just a tad slower than last month. This is the last jobs report before the Federal Reserve meets and potentially raises rates. They should hold steady, and let the economy steep a little longer, so the recovery can reach the most distressed communities.